The answer to this question is simple: yes! Regardless of the type of business you have, banks and other financial services providers are going to play some role in modern-day business transactions.
Microfinance is getting quite some attention nowadays for both positive and negative reasons. Some say it can be a solution to address poverty or to facilitate financial inclusion. Others opine that it creates more problems for low-income people, by serving as a debt trap. As far as investment is concerned, though, it’s fairly easy to answer the question whether or not it’s a good idea investing in a microfinance business.
No, this is not the Robin Hood you likely have in mind. This is about stock trading mobile app provider Robinhood, which is also known as a “microfinance giant”. The company has been helping individuals trade stocks through an easier and simpler platform. It has recently announced that it is joining the cryptocurrency trading bandwagon. The company was founded in 2013 and is regulated by the Financial Industry Regulatory Authority and Securities and Exchange Commission and seeks to democratize stock trading and now wants to include cryptocurrency as part of its offerings.
Sharone Perlstein is a well-informed witness to the radical changes that microfinance and mobile technology are bringing about in the world of finance and banking. As Perlstein sees it, the smartphone is now making significant advances possible by significantly increasing the accessibility of microfinance on a global level. In his view, this whole dynamic is radically empowering ordinary people all over the world and causing the entire banking system to change in ways that will make it far more suitable for a world in which rapid communications and online access are critically important.
On a truly global level, but especially in developing regions, Microfinance is allowing creative people with limited financial means of their own to turn their business ideas into living realities. Microfinancing is therefore providing an excellent solution to the all-too-well-known problem of how someone who has an excellent idea for a business but lacks funding can act on that idea.